IAB Report: Marketers to Spend More than US $10 Billion on Video in 2016

What: Advertisers will spend more than 10 billion in digital video in 1, representing an 85% increase from 2 years ago, based on“Digital Content NewFronts: Video Ad Spend Study,” a study conducted by Advertiser Perceptions on behalf of the Interactive Advertising Bureau (IAB).Why it matters: 68% of those marketers and agency executives believe that original digital video will become as important as original TV programming in the next 3 to 5 years.

Advertisers and media buyers have made an impressive 114 % increase in investments in original digital video programming over the past two years, according to the third annual “Digital Content NewFronts: Video Ad Spend Study” conducted by Advertiser Perceptions on behalf of the Interactive Advertising Bureau (IAB).

Reinforcing the critical role the Digital Content NewFronts has played in media buying decisions, eight out of 10 respondents said that their attendance at the 2015 NewFronts resulted in increased spending on original digital video content in the 12 months that followed, and/or motivated them to increase original digital video budgets overall.

Buyers who primarily focus on TV were more likely to commit those extra dollars at the NewFronts (64% vs. 42%), while digital-focused buyers were more likely to spend them throughout the year (49% vs. 41%).

Buyers who primarily focus on TV were more likely to commit those extra dollars at the NewFronts, while digital-focused buyers were more likely to spend them throughout the year.

Nearly three-quarters (71%) of those surveyed also said that they plan to attend the 2016 NewFronts, expecting to spend more than a third of their overall digital video budgets for the year at the annual marketplace.

The study further revealed that more than two-thirds of marketers and agency executives (68%) believe that original digital video will become as important as original TV programming in the next 3 to 5 years. In order to close the gap between digital video and TV programming, both groups want to buy digital video that reaches target audiences in high-quality programming and delivers more concrete ROI metrics.

68% of marketers and agency executives believe that original digital video will become as important as original TV programming in the next 3 to 5 years

While the majority of buyers surveyed plans to spend more overall on all digital video (63%) and mobile video (62%), original digital video content has grown in importance, now accounting for 44% of a typical digital video budget, up from 38% two years ago.

Native advertising has also established a foothold in dollars spent on original digital video, accounting for one-third (32%) of that investment.

Ongoing Strong Growth for Digital Video

Advertisers are spending on average more than US$10 million annually on Digital Video, representing an 85% increase from 2 years ago, based on a survey of 360 advertisers and marketing professionals.

Video represents an increasing share of Digital/Mobile Ad Spending, with growth driven by a substantial increase in Mobile Video allocations.

Robust spend optimism (plans to invest more in next 12 months) for both Digital and Mobile Video; while most are expecting to maintain current TV spend levels.

Original Digital Video Content Spending & Trends – Robust growth: Ad spending on original digital programming has more than doubled since 2014. Nearly one-third of ODV dollars are going to Native advertising opportunities.

In addition, Yahoo partnered with Nielsen & Hunter Qualitative to collect insights related to different variables within the pre-roll and native video ad formats. The study suggests the greatest growth in digital video consumption is coming on mobile devices, while traditional TV viewing time has declined slightly.

The study further suggests cross-platform digital video ads are more effective for brands than PC or mobile-only video campaigns.

Yahoo’s video creative best practices:

Larger logos deliver higher brand metrics than smaller logos, and even more so for Millennials.

CTA’s should be included in video ads, as they generate increases in lower-funnel metrics such as Purchase Intent and Brand Recommendation.

The brand should be introduced at any point in the video ad. Key brand metrics are not impacted whether the brand is introduced in the beginning, middle, or end of the video.

Different ad tones should be employed to drive Millennials down the purchase funnel.

Video ads must be optimized for screen alignment.Horizontal is more effective at increasing familiarity and purchase intent when compared to the relatively newer vertical portrait ads.

When it comes to native, auto-start ads drive a slight increase in brand affinity and outperforms userinitiated ads in recall and fixation.

“Marketers and agencies are telling us they clearly see great value in original digital video programming,” said Anna Bager, Senior Vice President and General Manager, Mobile and Video, IAB. “This study demonstrates that the NewFronts has the ability to move ad dollars. Considering this year’s presenter line-up of top-tier, innovative media companies, and content creators, we expect that the event will inspire spend during the marketplace’s two-week period and beyond.”